VDL Groep shows recovery in 2021, despite turbulent circumstances

VDL Groep shows recovery in 2021, despite turbulent circumstances

25 March 2022

The year 2021 has been a hectic year for VDL Groep. External factors have caused a lot of turbulence. Nevertheless, the industrial family business in the high-quality manufacturing industry headquartered in Eindhoven has shown resilience: despite not reaching the pre-corona crisis results, 2021 has brought recovery. The year 2022 will again see a lot of turbulence, also due to external factors. Nevertheless, VDL Groep continues to invest and innovate fully.

The combined annual turnover in 2021 amounted to 4.955 billion euros, an increase of 6 percent compared to the annual turnover of 2020 (4.686 billion euros). The operating net result grew from 97 million euros in 2020 to 145 million euros in 2021. By way of comparison, the combined turnover in 2019 amounted to 5.780 billion euros and the net result 156 million euros. The order book stood at 1.734 billion euros in week 11 of 2022 (excluding the Automotive Assembly division), compared to 1.441 billion euros in week 11 of 2021. The number of employees increased during the same period by 1,196 employees to 15,926.

'Operationally strong recovery'

“Partly on the basis of our very well-filled order book, we had great confidence from the beginning of 2021 that we would recover from the corona dip in 2020,” says CEO Willem van der Leegte. “At the same time, there were also challenges and uncertainties due to global trade conflicts and the corona crisis. We have faced unbalanced supply chains mainly due to limited availability of materials and price fluctuations. Up to and including the third quarter of 2021, we applied for NOW, worth 70 million euros, with which employees' salaries were continued, and partly as a result of this, all jobs were kept. Due to our strategy of spreading risks through diversification of activities, the first half of 2021 (combined turnover of 2.5 billion euros, net result of 69 million euros) has been fairly good. In the third quarter, deliveries slowed down somewhat and in the fourth quarter turnover was again reasonable. At the bottom of the line, we are certainly not dissatisfied and we see a strong operational recovery in results, despite the fact that we are not yet at the level before the corona crisis. In the autumn we also had to deal with a cyber attack, which forced us to work offline for almost a month. Before the end of 2021, however, we were up to date with at least 95 percent of the deliveries.”

Supplies

The turnover of the Subcontracting division increased from 1.503 billion euros in 2020 to 1.851 billion euros in 2021. This increase of 23 percent is mainly due to the fact that the companies active in this division have aligned themselves positively to support the growth of our customers. to facilitate. The commitment to high-quality innovation has further strengthened our position in this sub-area. The Supplies division is profitable. The order book increased in 12 months from 559 million euros in week 11 of 2021 to 855 million euros in week 11 of 2022.

Car assembly

The turnover of the Car Assembly division fell by 12 percent from 2.320 billion euros in 2020 to 2.051 billion euros in 2021. The year ended with a positive result. The corona crisis continues to have a significant impact on the global auto industry. Due to a worldwide shortage of electronic components, VDL Nedcar was unable to produce for no less than 48 days in 2021. In the first two months of 2022, 18 production days have already been lost due to the same problem.
In June we announced that VDL Nedcar would be building vehicles for the American start-up Canoo. However, in mid-December, we and Canoo announced that they would not continue this collaboration. Canoo and VDL Groep are investigating the continuation of their collaboration, ie separately from VDL Nedcar.
At the end of 2021, we informed our employees of VDL Nedcar that we are in talks with the American company Rivian about cooperation on various fronts. Those conversations are ongoing. VDL Nedcar built 105,214 MINIs and BMWs last year (2020 production volume: 125,666 cars). Due to supply chain disruptions as a result of the war in Ukraine, production at our car factory in Born has been halted since week 10 of 2022. Preparations have been made to resume production on Monday, March 28.

Buses

The turnover of the Buses division increased by 13 percent, from 339 million euros in 2020 to 384 million euros in 2021. This division is loss-making. The corona crisis continues to have a strong grip on the Buses division, and in particular the touring car activities. The travel industry is not yet at the level it was before the corona crisis, which means that the demand for coaches is virtually nil. Nevertheless, during the past year we announced deliveries of dozens of coach buses, which are often used in public and intercity transport. Because governments, as concession providers or as direct customers, have to ensure a structurally comprehensive public transport network and do not want to delay climate targets, public transport companies continue to use new zero-emission vehicles to make the fleet more sustainable. VDL is well positioned as a forerunner in the field of electric mobility. We announced several orders in 2021, including our largest electric city bus order to date, 102 e-buses for Oslo.
The course taken to concentrate the production of electric city buses in Valkenswaard and Roeselare is taking shape. In February 2022, we celebrated the start of construction on the realization of our new, ultramodern and CO2-neutral factory in Roeselare, where the first new electric buses produced will be launched in the first quarter of 2023. With this investment we reinforce our ambitions: we want to remain at the forefront in Europe in the field of e-mobility. Even in these difficult times for the Buses division, our focus remains on the long term and we continue to invest in innovation. For example, we are working on the further development of our VDL Futura coach and the new generation of electric city bus VDL Citea. We have reached the milestone of 1,000 electric buses operating in 11 countries. Together, these buses are on their way to the 200 million clean, electric kilometers. For the understanding: that is 5,000 times around the world. Buses' order book has decreased in the past 12 months from 510 million euros in week 11 of 2021 to 421 million euros in week 11 of 2022.

Finished products

Our companies that are part of the Finished Products division jointly turned in 669 million euros last year compared to 524 million euros in 2020. This increase of 28 percent can be explained by the recovery of the reduced market demand as a result of the corona crisis. The Finished Products division is profitable. The order book has increased in the past 12 months from 372 million euros in week 11 of 2021 to 458 million euros in week 11 of 2022.

Outlook

The order book of VDL Groep (excluding the Car Assembly division) rose by no less than 30 percent last year and remains at a high level. Under normal circumstances, that growth will translate into revenue growth, but we continue to face uncertainties due to disruptive external factors on the global stage.

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